GOODS CLEARED UNDER DSIR (R &D) UNIT

[SURYAKANT MITHBAVKAR]

We have cleared two machine under DSIR (R &D Unit) to our customer on 25/11/14 in one invoice without payment of excise duty.

We have paid @6% on assessble value of invoice as payment of excise duty to department in next month under the Excise Law Act.

Now, our customer requirement is they want to transfer one machine to their excisable unit on permanent basis and request us for solution for the same.They are ready to pay excise duty on the same machine which they want to transfer to their excisable unit.

Please advise which procedure we have to adopt for the above transaction.

[Suryanarayana Sathineni]

Dear Friend,

I am sure you might have cleared the subject machines to your customer claiming duty exemption under Notification No. 10/97-CE as amended from time to time against their giving declaration in terms of the said Notification.

It is not clear from your qauery as to why you have paid 6% duty on the invoice value in subsequent month when you have cleared the machines without payment of duty claiming exemption under R&D.

Now that your customer is requesting them to help for their clearing one machine to their other normal unit, you may take a certificate from your excise authorities that you have paid the duty and send the same to your customer so that they will take credit of such duty based on that certificate ( if it is within the time limit of one year) and clear one machine by reversing proportionate duty in terms of Rule 3(5) of Cenvat Credit Rules,2004; or

Let your customer return one equipment to your company and you will after compliance with Rule 16 of CER,2002 again clear the same on payment of duty directly to the other unit of your customer.

Best Regards

Suryanarayana

AI Summary

Duty re-assessment for R&D-exempt goods: secure evidence of payment or follow return-and-reclearance to enable credit or reversal. Where machinery removed under an R&D exemption is to be transferred to an excisable unit, obtain an excise certificate evidencing duty payment so the recipient may claim credit (subject to time limits) and perform proportional Cenvat credit reversal; or effect a return of the equipment to the supplier and re-clear the specific machine to the excisable unit on payment of duty after complying with excise return and re-clearance procedures.